CME Group "mistakenly" let some traders see secret swaps data

Published April 22, 2013

| Reuters

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CME Group said Monday that it mistakenly allowed "a small number" of traders to see confidential data on hundreds of swaps transactions that it collects under new rules mandated by Wall Street reform legislation.

Details on 500 swaps transactions tied to agriculture and energy were inadvertently released to some traders on April 1, CME said, after the Chicago-based exchange operator implemented an enhancement to its swaps-data warehousing service that contained a bug. CME corrected the problem within two days, it said in a statement.

Global lawmakers and regulators began clamping down on the opaque swaps industry after the 2007-2009 financial crisis, forcing much of the $600 trillion industry into regulated clearinghouses and requiring a wider distribution of data on swaps than had ever been available before.

Under new rules, traders are supposed to be able to access data on price and volume for many swaps transactions, although the identities of the traders involved are supposed to be kept secret.

But after CME rolled out its new software, some traders could see who had traded with whom. CME learned of the problem the following day from affected customers, and fixed it by April 3, it said.

The 500 disclosed transactions represent only a fraction of a total of nearly 1 million, CME said, but nevertheless could deal a blow to confidence in the ability of swaps data warehouses to protect their users' anonymity.

"All impacted customers were notified," CME said. "We regret this incident occurred, as maintaining the confidentiality of market participant data at all times is vital to the operation of our markets and systems."